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Finnish tech sector opposes government’s immigration reforms

Posted on by darion

Finland’s tech sector has faced strong opposition to new anti-immigration legislation that threatens business and industry plans to improve the country’s international reputation and its attractiveness for hiring foreign IT talent.

The conservative, far-right government of Prime Minister Antti Orpo is proposing legislative measures that risk discouraging IT talent from moving to Finland. In addition, the proposed reforms will make it harder for non-European Union (EU) citizens to find new jobs in Finland if their current employment contracts are not extended.

The proposed regulations are included in the Finnish government’s Labour Market Reform Plan (LMRP) based on immigration control. The LMRP includes stricter requirements for work visas, in addition to language tests in Finnish or Swedish.

Essentially, the proposed rules will make it much harder for IT professionals with work-related residence permits to remain in the country.

Finland
upon expiry of the employment contract or in the event of termination of the employment relationship.

IT organizations and tech start-up groups say the LMRP in its current form will put Finnish companies at a competitive disadvantage when recruiting skills and talent from outside

Finland
.

The proposed legislation, which the government wants to introduce in 2025, will require foreign IT specialists with residence permits for a work visa (WVRP) to leave Finland for six months if they are unemployed and unable to find new work, said Youssef Zad, chief economist at the Finnish Startup Community (FSC), a platform serving more than 240 early-stage technology companies in Finland.

“Six months is a relatively short period of time,” Zad said. “If professional workers feel they won’t be able to find work quickly enough within a certain six-month period after becoming unemployed, they may go to places where employment opportunities are more readily available.”

Termination of employment

Under the proposed law on immigration and labour market reform, companies and organisations in the public and private sectors will be obliged to inform the Finnish Immigration Service (Migri) about the termination of employment of a WVRP visa holder.

“The proposed tougher laws will pose a problem for many start-ups,” Zad said. “The new laws come amid concerns that immigration to

Finland
is based on the use of social benefits. Foreign specialists are not interested in the social benefits offered in

Finland . They are only interested in finding a new job in a timely manner.”

More stringent controls

The introduction and enforcement of stricter immigration and labor market regulations will make it harder for Finnish companies to achieve growth targets and recruit much-needed talent for research, development and innovation, said Laura Lindeman, senior director at Business Finland and head of the Work in Finland (WiFU) unit, a state-owned business development organization. “Our role is to promote

Finland and help attract start-up entrepreneurs to relocate here,” she said.

A study conducted in March by Statistics Finland showed that the lack of skilled labour is a major obstacle to driving economic growth

Finland Skills shortages have emerged as a key barrier to filling 90,000 jobs in 2022–2023.

The Ministry of Labour and Employment estimates that

Finland
will have to employ at least 100,000 new skilled workers in the period up to 2035.

Due to more stringent regulations regarding work permits and immigration,

Finland
 It is becoming increasingly difficult to recruit talented people, especially from

Turkey
,

China
,

India
,

Brazil
 AND

Vietnam
Lindeman said.

In addition, foreign entrepreneurs and employees with work visas have difficulties accessing standard financial products and services, e.g. opening a standard bank account, she added.

“What do entrepreneurs find particularly difficult in connection with the move?

Finland long waiting times at the bank,” Lindeman said. “It can take up to a year to open a bank account and get the digital login codes that open many other services in Finnish society. For banks, the reason is the need to comply with Know-Your-Customer obligations, and foreign customers require more investigative actions. At the same time, banks also know that foreign customers are the industry of the future.”

Non-EU citizens

The tightening of immigration rules by the Finnish government will also affect non-EU citizens already living in

Finland including asylum seekers. The Integration Act, which includes a wide range of measures, is due to enter into force by the end of 2024 and be passed in January 2025.

The reforms set out in the Integration Act will shift primary responsibility for assimilating immigrants from the state to municipalities. The Act will allow local authorities to charge immigrants for certain services, including health care.

In March,

Finland The Ministry of Home Affairs (MoI) has announced plans to tighten the conditions under which permanent residence permits can be issued. The MoI has set up an ‘advisory group’ to develop and submit proposals for consideration by the government’s Immigration Reform Legislative Programme (IRLP) in the second quarter of 2025.

The main goal of the IRLP is to integrate immigrants more quickly into Finnish society through language training, cultural appreciation and introductory courses on citizenship rights. Permanent residence permits will be limited to immigrants who successfully complete combined integration programs. The reform will extend the period of residence required to obtain a permanent residence permit from the current four years to six.

From 2025, the condition for obtaining a permanent residence permit in Poland will be knowledge of Finnish or Swedish, confirmed by a language test.

Finland In addition, applicants for permanent residence will be required to provide documentary evidence of identity and continuous employment for the two-year period preceding the application.

IN

Finland permanent residence permits are currently granted to eligible applicants if they can prove residence for four years and an annual income exceeding €40,000. Applicants with a Master’s degree recognized in

Finland
and uninterrupted employment of at least two years may also meet the conditions for obtaining a permanent residence permit.

Increase of unemployment

Finland’s weakening economy, with rising unemployment from 2023, has helped create a larger pool of IT-skilled workers amid immigration-led labor market reforms, said Samuli Salonen, CEO of TalentBee, a Helsinki-based talent acquisition company.

“Three years ago, it was very difficult to find talent for skilled or senior positions,” he said. “There were far fewer candidates on the open market, especially in the tech industry, where everyone was hiring. In today’s job market, where the economy isn’t as strong, there are a lot of candidates competing for the same job.”

According to data from the Ministry of Economy and Employment, the number of unfilled vacancies in

Finland
in April 2024, it fell to 114,500. This is about 56,000 fewer than in the same month in 2023. The unemployment rate rose to 275,300 in April, an increase of more than 29,000 since April 2023.

Amid criticism from business and industry groups, the government plans to call a public hearing in August to outline and explain the various measures contained in its immigration and labour reform plans.

“The public hearing will be held in English and open to everyone,” said Jarmo Tiukkanen, senior adviser on labour migration and integration policy at the Ministry of Economic Affairs and Employment. “It will describe and explain the government’s proposals and provide an overview of how the legislative reforms will work in practice and how they will affect the economy. We want people to be able to ask questions in an open discussion forum.”